On 15 November 2023, the Federal Cabinet passed the Fourth Minimum Wage Adjustment Ordinance (MiLoV4), which initially raises the statutory minimum wage to EUR 12.41 gross per hour on 1 January 2024, before increasing it in a further step to EUR 12.82 gross per hour on 1 January 2025. As part of this increase, the earnings thresholds for marginally employed persons (mini-jobs) will also change.
Increase in the statutory minimum wage
The statutory minimum wage was introduced in Germany in 2015 and has since been the lowest wage threshold for almost all employees. Only a few groups of people are exempt, such as the long-term unemployed in the first six months after starting work, trainees, interns (for employment of less than three months) and participants in work promotion programmes.
When it was introduced in 2015, the minimum wage was initially set at €8.50 per hour before being raised in several stages to its most recent level (1 October 2022) of €12.00 per hour.
With the MiLoV4, the Federal Cabinet is now implementing the decision of the Minimum Wage Commission of 26 June 2023 in a legally binding manner, raising the statutory minimum wage to EUR 12.41 per hour with effect from 1 January 2024. On 1 January 2025, the minimum wage is to increase by a further 41 cents to 12.82 euros per hour.
In practice, this means that salaries must be reviewed and, if necessary, adjusted accordingly on 1 January 2024 (and again on 1 January 2025). For a working week of 40 hours, the minimum salary will rise to €2,151.03 gross in 2024 and €2,222.10 gross per month in 2025. For a working week of 38 hours, the salary will rise to €2,043.52 gross in 2024 and to €2,111.03 gross per month in 2025.
Effects on the earnings threshold for mini- and midi-jobs
With the increase in the minimum wage, the marginal earnings threshold, which has been dependent on the minimum wage since 1 October 2022, will also increase, which in turn will affect the mini-job earnings threshold.
In the context of marginal employment, a maximum working time of 10 hours per week, i.e. 43.33 hours per month, is generally permitted, whereby unforeseen exceeding of the marginal earnings threshold is permitted for a maximum of two months per year. Taking into account the increased minimum wage, this results in an increased gross mini-job earnings limit of EUR 538.00 (43.33 hours x EUR 12.41, rounded up to full euros) from 1 January 2024. For those employees who previously received €520.00 gross for working 43.33 hours per month, the remuneration must be increased to €538.00 gross if the working hours remain the same.
As a result, employees with gross monthly earnings of between €521.00 and €538.00 will be classified as marginal employees from 1 January 2024 and will therefore no longer be subject to social security contributions. Accordingly, contributions to health, long-term care and unemployment insurance will no longer apply to these employees.
Employers should therefore discuss with their employees - who have a corresponding gross monthly income - whether and how the employee's health and long-term care insurance should be organised (e.g. through family insurance or voluntary insurance).
The limits of the midi-job also change (but only in the lower range). From 1 January 2024, the midi-job will start at EUR 538.01 gross per month. The maximum limit of 2,000.00 euros gross per month remains in place.
In collaboration with: Ginette Beccard, Jan Philipp Löffler
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